The tourist letting licence in Mallorca

Buyers ask whether a property can be licensed. The honest answer usually starts with a question about the zone, not about the house.

The place system

Rather than issuing licences on demand, the island works from a capped pool of tourist places distributed by zone and by category of property. When the pool for a zone is exhausted, no new licence can be granted there however compliant the property is. Places can be acquired from the pool when it is open, or in some cases transferred, which is why a property that already holds a licence trades at a premium.

What the property must meet

A current occupancy certificate and a registered energy certificate. Compliance with the equipment and safety standards set for tourist accommodation, which cover matters such as first aid provision, complaint forms, information for guests and the condition of installations. And, where the community statutes require it, the consent of the community of owners, which a regional licence does not override.

What it is worth

A licensed property can generate a season's turnover that a similar unlicensed one cannot, and that difference is capitalised into the price. In practice a transferable licence adds a substantial premium, and it is the reason two apparently comparable properties can be marketed 15 or 20 per cent apart. A buyer paying that premium should verify the licence directly with the regional register before completion, not accept a copy.

Verification takes one enquiry and establishes that the licence exists, covers this property, and is current.

The obligations that come with it

Registering guests and transmitting the data to the authorities for each stay. Collecting the tourist tax per person per night and declaring it. Displaying the licence number in every advertisement on every platform. Keeping complaint forms available. And declaring the rental income for tax. A licence is a business authorisation, and the compliance that goes with it runs continuously rather than at the point of application.

The figures explain why a licence carries a premium. A property letting 14 weeks a season at 1,600 € a week turns over 22,400 €, against nothing for the same property unlicensed. Deducting management at 22 per cent, cleaning and linen at 4,000 € to 7,000 € and the tourist tax, the net still supports a purchase price premium that commonly runs 15 to 20 per cent.

The compliance load has figures too. Guest data must be transmitted for every stay, the tourist tax is collected per person per night and declared periodically, and the licence number must appear in every advertisement on every platform. On a property letting 14 weeks with an average stay of 5 nights, that is around 20 separate registrations a season.